Copper Soars to Record High Amid Dollar Erosion Fears
Copper futures closed at $6.71 per pound on Tuesday, setting a new record for the metal's highest closing price in history.
The move is part of a larger trend known as the debasement trade, where investors are rotating into scarce assets due to fears that US debt management will erode the value of the dollar.
Copper prices have been driven up by supply strain, with reports indicating that London Metal Exchange stockpiles fell 14% since late July to 214,550 tonnes. Chile also trimmed its output forecast for a second straight quarter, and an outage at Indonesia's giant Gresik smelter has tightened the market further.
The US Treasury's decision to double its maximum bond buyback size to $4 billion from $2 billion has contributed to dollar weakness fears, with the currency index sitting near three-month lows. Gold prices have also risen, trading around $4,666 an ounce and tracking its best month since 1999.
Bitcoin has moved in lockstep with the metals, briefly touching $81,000 earlier on Tuesday before settling at $78,900. The Treasury announcement caught bearish traders off guard, with over $4 billion in short positions liquidated during the breakout.